Why the Price of Gold Is Rising

3EDGE Asset Management's Chief Investment Strategist Fritz Folts and CEO/CIO Steve Cucchiaro discussed the factors driving gold's over 35% year-to-date price increase. They emphasized the current market environment's favorability towards hard assets over bonds for portfolio diversification and recommended investors consider an allocation to gold and other hard assets.

Analysis

Analysis from 3EDGE Asset Management, presented by its Chief Investment Strategist Fritz Folts and CEO/CIO Steve Cucchiaro, puts forward a strongly bullish case for gold and other hard assets. The firm highlights gold's significant year-to-date price increase of over 35% as a key performance indicator. The core of their argument is a strategic shift in portfolio diversification, positing that the current market environment favors hard assets over traditional fixed-income instruments like bonds. This perspective challenges conventional asset allocation models and suggests that the factors driving gold's rally may persist, warranting a direct allocation to the asset class as a defensive and growth-oriented holding.

Key Decisions for Investors

• Investors should evaluate the thesis that hard assets are becoming superior to bonds for portfolio diversification and consider re-assessing their strategic allocation to gold.
• Given the reported 35% year-to-date surge in gold's price, portfolios that are underweight in commodities may warrant a review to determine if an entry or increased allocation is appropriate for diversification.
• It is prudent to weigh 3EDGE's bullish stance against one's own macroeconomic forecast before significantly shifting capital away from traditional fixed-income holdings.